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Daily Mains Practice Questions 27-01-2023

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January 27, 2023

General Studies – II

Government Policies

1) With the Introduction of T+1 settlement, Indian markets will be more efficient and secure than other markets. Elaborate (200 Words)

Refer - Business Line

General Studies – III


2) Custom duty reforms can benefit the Indian Economy in various ways. Analyse in the context of Productive linked incentive scheme. (200 Words)

Refer - Business Line


3) Discuss the various impacts of sovereign green bonds on the investors and environment. (200 Words)

Refer - The Indian Express


Enrich the answer from other sources, if the question demands.

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IAS Parliament 1 year


·        The Indian market will henceforth be the fastest in trade settlement, with the shares being transferred to the buyer’s demat account and the funds landing in the seller’s bank account a day after execution of the trade.

·        With only the Chinese stock market having introduced T+1 settlement partially, Indian markets will be more efficient and secure than other markets.

·        Faster trade settlement makes it more convenient for investors and reduces settlement risk considerably.

·        The market regulator was right in moving ahead with implementation of the T+1 settlement, despite protests from domestic as well as foreign intermediaries and investors.

·        With the top 100 stocks accounting for around 60 per cent of market volume, there is likely to be some short-term volatility and impact on market volumes as traders and investors adjust to the new system.

·        The market regulator is doing the right thing in harnessing the technological capability of market infrastructure institutions to implement a series of regulatory changes to improve investor experience and security.

·        With the investor participation surging during the pandemic and more tech-savvy investors entering the market, this is the right way to retain these investors as well as to increase their number.



·        India should announce a five-year duty freeze. Any change may upset many PLI/PMP and other manufacturing programmes. The government must reduce import duties only when a clear economic case is present.

·        Import duty on components will promote deep manufacturing. All electronic and complex engineering devices consist of thousands of components.

·        India will become a true manufacturer of electronics and telecom devices only when components are manufactured here. But if the duty on components is zero, they will be imported, resulting in the simple assembly of final products in India.

·        For instance, during 2015-17, many firms started assembling smartphones by importing components and SKD kits. Tax arbitrage provided this opportunity.

·        Also, introduce technical regulations, quality control orders, and compulsory registration orders. This will ensure quality production and check substandard imports.

·        An inverted duty structure (IDS) is a situation where the import duty on finished goods is lower than the import duty on intermediate products or raw materials.

·        It is crucial to establish a link between IDS and ERP. FTAs (free trade agreements) have multiplied the number of IDS cases.

·        The government has the flexibility to ignore the revenue angle while making decisions. Customs duties contribute to less than 8 per cent of gross tax revenue.


·        Green bonds are bonds issued by any sovereign entity, inter-governmental groups or alliances and corporates with the aim that the proceeds of the bonds are utilised for projects classified as environmentally sustainable.

·        The RBI is auctioning two green bonds with tenures of 5 and 10 years, worth Rs 4,000 crore each.

·        Green Bonds have emerged as an important financial instrument to deal with the threats of climate change and related challenges.

·        According to the International Finance Corporation (IFC), a World Bank Group’s institution, climate change threatens communities and economies, and it poses risks for agriculture, food, and water supplies.

·        Green Bonds offer investors a platform to engage in good practices, influencing the business strategy of bond issuers.

·        In this way, the growth in Green Bonds and green finance also indirectly works to disincentivise high carbon-emitting projects, as per the IFC.

·        The country’s climate actions have so far been largely financed from domestic resources and it is now targeting the generation of additional global financial resources.

·        The government will use the proceeds raised from SGrBs to finance or refinance expenditure (in parts or whole) for various green projects, including renewable energy, clean transportation, energy efficiency, climate change adaptation, sustainable water and waste management, pollution and prevention control and green buildings.




IAS Parliament 1 year

Good attempt. Keep Writing.



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